With foreign central bank appetite for US Treasuries in retreat, what will replace the current system? I don't think anyone knows. The chart below suggests we go back to substantial central bank gold holdings. Maybe. IMHO, fragmentation and a broad erosion of trust is a likely path -- how that "erosion of trust" plays out, however, is difficult to speculate. I would think gold will play a bigger role going forward, but it may be naive to think it will simply go back to the 'old days'. In my crystal ball is mostly instability -> volatility. And remember, when a country is cornered for whatever reason (political instability may well result in some countries), the rules of the games may change along the way. Yes, gold may be a "beneficiary" of that process, but what I doubt it will simply be central banks holding a bit more gold then before.

Disclosure for he chart: it's for illustrative purposes only, and the arrows are to be taken as a risk scenario, not as a prediction.